Debt consolidation can put a stop to foreclosure if you choose the right timing and you do not keep postponing the decision waiting from some magic solution. Foreclosure can be stopped; it just has to be your choice. Debt Consolidation does not necessarily imply a new loan. Debt consolidation loans are only one form of debt consolidation. There are other options to be considered too. The first approach a debt consolidation agency will try, implies contacting your creditors and exploring the possibility of negotiating your debt so as to obtain better and more affordable terms on your current loans.
What Kind Of Debt Is Subject to Foreclosure
Foreclosure is a legal proceeding by which the debtor is deprived from the rights over a property due to the failure to comply with the repayment of a debt. Thus, only defaults on secured debts can carry foreclosure as a consequence. While often foreclosure is used as synonym of repossession, truth is that foreclosure is the legal process explained above and repossession is the consequence of that process. It is the actual execution of the judge’s decision.
Home loans, home equity loans and car loans (when the vehicle is used as collateral) are the main examples of debts that can imply a foreclosure if you default on the loan. Skipping one payment or paying late will not necessarily imply foreclosure though. A continued failure to repay the loan is necessary to trigger the legal action. Legislation varies but usually more than one missed payment is needed.
How Debt Consolidation Stops Foreclosure?
When a debtor is planning to take legal action there is an obligation of notifying you of this. If such thing occurs, you need to take immediate action and contact a either a legal advisor or a debt specialist with legal knowledge. Debt consolidation agencies are used to working with these cases and can aid you in stopping foreclosure. It is important to note that the timing is essential, you need not wait, and you have to act right away.
Legal proceedings are costly and chances are that the lender would prefer a out of court solution. Thus, the debt consolidation agency will offer to reschedule your repayment program and negotiate with all your creditors at the same time, so the resulting terms are affordable to you and can guarantee the repayment for all of them even if they have to sacrifice some of their profits.
Part of the negotiating process will be to agree with all debtors holding the right to take legal action against you to refrain from doing so and in case there is a legal process outstanding to withdraw the claim till the negotiations have ended and a settlement is reached. Since debt consolidation processes can take long, they will also buy you some time to improve your finances, increasing your income and reducing your payments.
Kate Ross is a professional consultant at Speedybadcreditloans.com where she publishes informative financial articles about Bad Credit Loans, Free Goverment Grants and Leasing, among other subjects.
Article Source: http://EzineArticles.com/?expert=Kate_Ross
Monday, June 4, 2007
Subscribe to:
Posts (Atom)
